Category Archives: inspection

One of the attorneys I met on LinkedIn posted this little story. I am reproducing it here as a great teachable moment.

During the French revolution three prominent, but very unfortunate, professionals were condemned to beheading by the guillotine: a priest, a doctor, and an engineer. The three were conveyed to the scaffold together in an old ox cart and were marched up to the guillotine together amidst amass of cheering blood thirsty spectators. The priest was the first to meet his fate. The executioner very politely asked the priest if he preferred to avoid seeing the blade fall by lying face down rather than face up. The priest replied, “I’ve led a good life, have nothing to regret, and want to meet my maker face-to-face.” So the priest lied down facing the blade. The executioner pulled the cord releasing the blade and it plummeted toward the priest’s exposed neck. But within a half inch of reaching its fatal destination the blade stopped literally in its tracks. The crowd roared with delight and many of the onlookers fell to their knees in prayer. Not wanting to put any victim to double jeopardy the authorities released the priest, to the great delight of the crowd. Then came the doctor’s turn. He was asked the same question and thought “if it worked for the priest maybe it will work for me too,” so he requested to take the blade face up. Again the blade stopped a half inch from the target, and as with the priest, the authorities released the doctor. Now was the engineer’s turn and, being no one’s fool, he also opted to take the blade face up. As he lay with his neck firmly placed in the crook of the guillotine and looked up to his maker, and to the blade, he exclaimed, “Ooh, I think I see your problem.”

Moral of the story: Only answer the question that’s asked, and don’t volunteer information, your neck may be at stake, and in the case of this discussion, your client’s neck!

Remember this story next time when you are being deposed or when you are speaking with an inspector.

In my last blog, I discussed the factors an agency such as EPA would use to determine if it wants to proceed with criminal investigation. That’s step one of a two-step process. Once an agency completes its investigation, it may then refer the case to the prosecutors for prosecution.

Will the prosecutor exercise its prosecutorial discretion? That’s the second step.

The best way to demonstrate how a prosecutor decides whether to prosecute a case or not is by the following example of a tale of two companies. The US Department of Justice issued a memo some time ago outlining the factors a US Attorney should consider in targeting a company for criminal prosecution of environmental crimes.

The memo gives the examples of two companies – Company A and Company Z. A tale of two companies.

Here is what Company A does:

1. It regularly conducts a comprehensive audit of its compliance with environmental requirements.

2. The audit uncovered as information about employees disposing of hazardous wastes by dumping them in an unpermitted location.

3. An internal company investigation confirms the audit information. (Depending upon the nature of the audit, this follow-up investigation may be unnecessary.)

4. Prior to the violations the company had a sound compliance program, which included clear policies, employee training, and a hotline for suspected violations.

5. As soon as the company confirms the violations, it discloses all pertinent information to the appropriate government agency; it undertakes compliance planning with that agency; and it carries out satisfactory mediation measures.

6. The company also undertakes to correct any false information previously submitted to the government in relation to the violations.

7. Internally the company disciplines the employees actually involved in the violations, including any supervisor who was lax in preventing or detecting the activity. Also, the company reviews its compliance program to determine how the violations slipped by and corrects the weakness found by that review.

8. The company discloses to the government the names of the employees actually responsible for the violations, and it cooperates with the government by providing documentation necessary to the investigation of those persons.

According to DOJ, Company A would stand a good chance of being favorably considered for prosecutorial leniency, to the extent of not being criminally prosecuted at all.

At the opposite end of the scale is Company Z, which does the following:

1. Because an employee has threatened to report a violation to federal authorities, the company is afraid that investigators may begin looking at it. An audit is undertaken, but it focuses only upon the particular violation, ignoring the possibility that the violation may be indicative of widespread activities in the organization.

2. After completing the audit, Company Z reports the violations discovered to the government.

3. The company had a compliance program, but it was effectively no more than a collection of paper. No effort is made to disseminate its content, impress upon employees its significance, train employees in its application, or oversee its implementation.

4. Even after “discovery” of the violation the company makes no effort to strengthen its compliance procedures. For example, If the company had a long history of noncompliance, the compliance audit was done only under pressure from regulators, and a timely audit would have ended the violations much sooner, those circumstances would be considered.

5. The company makes no effort to come to terms with regulators regarding its violations. It resists any remedial work and refuses to pay any monetary sanctions.

6. Because of the noncompliance, information submitted to regulators over the years has been materially inaccurate, painting a substantially false picture of the company’s true compliance situation. The company fails to take any steps to correct that inaccuracy.

7. The company does not cooperate with prosecutors in identifying those employees (including managers) who actually were involved in the violation, but it resists disclosure of any documents relating either to the violations or to the responsible employees.

Under these circumstances, leniency by the DOJ is unlikely.

The only positive action by Company Z is the so-called audit, but that was so narrowly focused as to be of questionable value, and it was undertaken only to head off a possible criminal investigation. Otherwise, the company demonstrated no good faith either in terms of compliance efforts or in assisting the government in obtaining a full understanding of the violation and discovering its sources.

Doing the wrong thing during an agency inspection can have bad consequences. Always be prepared for any agency inspection. That means you need to have all your environmental records in good condition at all times. Make sure they are up to date and easily accessible to the inspector. The last thing you want to have happened is to have the inspector wait around at your facility while you scurry around looking for records that the inspector wants to review.

Another thing to remember is NEVER reprimand your own employees in front of any inspector. Why? It gives the inspector a very negative perception of how you run your business and treat your employees. Furthermore, you have just humiliated your employee in front the inspector and you have just made an enemy out of that employee.

There are many more tips on how to manage an inspection that are discussed at our 2-day environmental seminars. We also have a live webinar on “How to manage an agency inspection.”